Correlation Between AOYAMA TRADING and SBM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING and SBM OFFSHORE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AOYAMA TRADING and SBM OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and SBM OFFSHORE, you can compare the effects of market volatilities on AOYAMA TRADING and SBM OFFSHORE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AOYAMA TRADING with a short position of SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and SBM OFFSHORE.
Diversification Opportunities for AOYAMA TRADING and SBM OFFSHORE
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AOYAMA and SBM is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE and AOYAMA TRADING is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AOYAMA TRADING are associated (or correlated) with SBM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM OFFSHORE has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and SBM OFFSHORE go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and SBM OFFSHORE
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 2.99 times more return on investment than SBM OFFSHORE. However, AOYAMA TRADING is 2.99 times more volatile than SBM OFFSHORE. It trades about 0.08 of its potential returns per unit of risk. SBM OFFSHORE is currently generating about 0.05 per unit of risk. If you would invest 306.00 in AOYAMA TRADING on September 3, 2024 and sell it today you would earn a total of 1,104 from holding AOYAMA TRADING or generate 360.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOYAMA TRADING vs. SBM OFFSHORE
Performance |
| Timeline |
| AOYAMA TRADING |
| SBM OFFSHORE |
AOYAMA TRADING and SBM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and SBM OFFSHORE
The main advantage of trading using opposite AOYAMA TRADING and SBM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING position performs unexpectedly, SBM OFFSHORE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SBM OFFSHORE will offset losses from the drop in SBM OFFSHORE's long position.| AOYAMA TRADING vs. CVW CLEANTECH INC | AOYAMA TRADING vs. Brockhaus Capital Management | AOYAMA TRADING vs. SOFI TECHNOLOGIES | AOYAMA TRADING vs. Cardinal Health |
| SBM OFFSHORE vs. TOTAL GABON | SBM OFFSHORE vs. Walgreens Boots Alliance | SBM OFFSHORE vs. Peak Resources Limited |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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